Even in May, no demand for Electoral Bonds worth Rs 1000 and Rs 10000

There was an intense debate around the introduction of electoral bonds by the government. Data obtained from SBI reveals that there is hardly any demand for electoral bonds of lower denomination even in the month of May. Not a single bond in the denomination Rs 1000 & Rs 10000 was purchased in May, while 99.7% of bonds purchased in terms of value were in Rs 10 lakh & Rs 1 crore denomination.

The Electoral Bonds were first announced in the 2017-18 budget and the scheme was subsequently notified in January 2018. Factly had earlier written about the bonds, their impact on transparency etc.

Factly had earlier analysed the data obtained from the State Bank of India (SBI), the authorized bank to issue electoral bonds, about bonds purchased in March & April to conclude that there was hardly any demand for electoral bonds of lower denomination. The latest data provided by SBI suggests that not a single electoral bond was purchased in the denomination of Rs 1000 and Rs 10000 even in the May 2018 cycle. In terms of value of bonds purchased, 99.7% of the bonds in May are in the denomination of Rs 10 lakh & Rs 1 crore.

Not a single bond purchased in 7 cities in May 2018
The scheme was open for the first 10 days of May 2018 in the SBI branches in Chennai, Kolkata, Mumbai, New Delhi, Bangalore, Gandhinagar, Chandigarh, Bhopal, Jaipur, Lucknow & Jaipur. Among the 11 branches, bonds were purchased only in four (4) branches of New Delhi, Gandhinagar, Bangalore & Mumbai. Not a single bond was purchased in the rest of the seven (7) branches. The number of bonds purchased has reduced with each cycle. Compared to 520 bonds purchased in March 2018, only 204 bonds were purchased in May 2018.

More than 75% worth of bonds purchased in Mumbai & Bangalore
A total of 204 bonds worth Rs 101.4 crore were purchased in the May cycle, taking the total value of bonds purchased to Rs 438.3 crore till the May cycle. In terms of number of bonds purchased in May, Bangalore was way ahead with 123 bonds followed by 40 bonds in Mumbai. It has to be noted that the Karnataka Assembly elections were held on 12th May. In New Delhi, 20 bonds were purchased while 21 bonds were purchased in Gandhinagar.

In terms of the value, bonds worth Rs 40 crore were purchased in Mumbai, all in denomination of Rs 1 crore. Bangalore followed with bonds worth Rs 38.85 crore. Among these were 25 bonds in the denomination of Rs 1 lakh, 66 in the denomination of Rs 10 lakh and remaining 32 in the denomination of Rs 1 crore. In New Delhi, bonds worth Rs 10.55 crore were purchased while in Gandhinagar, bonds worth Rs 12 crore were purchased.Mumbai along with Bangalore accounted for more than 75% of the bonds purchased both in terms of value and number. Bangalore alone accounted for more than 60% of the bonds purchased in May, possibly because of the assembly elections.

99.7% of bonds purchased (in terms of value) were in denomination of Rs 10 lakh & Rs 1 crore
Data for May 2018 reveals that the bonds of lower denomination were hardly in demand, an indication that citizens may not be purchasing these bonds. Not a single bond was purchased in the denomination of Rs 1000 and Rs 10000. Out of the 204 bonds purchased in May, 30 were in Rs 1 lakh denomination, 81 in Rs 10 lakh denomination and the remaining 93 in Rs 1 crore denomination. Together, bonds in the denomination of Rs 10 lakh & Rs 1 crore accounted for 99.7% of the bonds purchased in terms of value. It is highly likely that the bonds in Rs 10 lakh & Rs 1 crore denomination are purchased by corporates than individuals.

Data from three phases indicates no demand for lower denomination
Data of electoral bonds purchased in the months of March, April & May 2018 clearly indicates that there is no demand for bonds of lower denomination. In terms of value, bonds of Rs 1 crore denomination accounted for Rs 384 crore or 87.6% followed by bonds in Rs 10 lakh denomination that accounted for Rs 53.9 crore or 12.3%. Together, they have accounted for more than 99.9% of total value of bonds purchased till date.